Housing Market
#1
Housing Market
Any predictions on the US housing market in short/mid term?
I recently moved over to Chicago and am really surprised at the high prices and lack of houses on the market.
Is it better to wait it out for a bit or is it better to take the plunge now?
thanks
I recently moved over to Chicago and am really surprised at the high prices and lack of houses on the market.
Is it better to wait it out for a bit or is it better to take the plunge now?
thanks
#2
Forum Regular
Joined: Mar 2017
Location: Elizabethtown, PA
Posts: 73
Re: Housing Market
I don't know about Chicago but round where I live in PA anything decent that goes on the market seems to be gone within a day or two. I know a lot of people are putting in offers without even having surveys done to make sure they get it. I have no idea how long the market will stay like this though.
#3
Re: Housing Market
The housing market is insanely hot right now, it's impossible to make a reliable prediction. Is it a bubble caused by pent up demand from last year combined with people now having big enough down-payments, or is it a natural reaction to a steady economy after a few years of nobody knowing wtf the president was going to do next to screw up particular sectors? Picking the wrong reason means you will lose out, possibly by a lot. A coworker convinced me that buying is good at any time since new land is not being made (at least not much), but if I had waited 6 months I would have saved tens of thousands.
There's no good answer.
There's no good answer.
#4
Forum Regular
Joined: Jun 2008
Location: Virginia
Posts: 129
Re: Housing Market
same kind of sales going through around here in VA. neighbour opposite had 20 viewers in the first evening, sold it, 7 offers.
priced at 30% up in 3yrs.
but then they will move to an inflated property also.
not good for FTB in my opinion.
factor in another year of rent payments against the inflation, might help a bit.
is the inflation reasonable? research the last sale price.
Mortgage Rates & terms good? another major factor.
priced at 30% up in 3yrs.
but then they will move to an inflated property also.
not good for FTB in my opinion.
factor in another year of rent payments against the inflation, might help a bit.
is the inflation reasonable? research the last sale price.
Mortgage Rates & terms good? another major factor.
Last edited by hutchison; Apr 16th 2021 at 9:07 pm.
#5
Re: Housing Market
It's a very regional situation; don't let the developments in one region influence your decision in another region.
Having said that, we are looking at ridiculously low interest rates right now, plus for those lucky enough not to have lost a job in the pandemic, the pandemic has been financially kind - forced savings. So more savings and low interest rates is fueling something of a boom. And the stock market has boomed, so even more growth in available resources.
Here in AZ, (Phoenix Metro) the market is insane - better than at any time since at least 2007, pre-crash. My realtor friend said she's made more money this year in 3 months than all of last year, OR the year before (pre-pandemic). But house prices in the SF Bay Area (CA) are stagnant / falling (* this is contradicted by the information I posted below so take what I say as a bit of anecdotal input, not fact). The new move towards 'work from home' has encouraged / allowed people to ditch their high-priced bay area digs for cheaper "nearby" states (Oregon, Washington, Arizona, Nevada). I sold my house in the bay area in 2017; it sold within a month. That same house is now on the market and hasn't moved in 4 months - unheard of in recent times.
I've always found the "Case-Shiller" indices to be very good to follow. Take a look at this - https://realestatedecoded.com/case-shiller/
Here's a table from that site showing the hottest markets:
Interesting to see San Francisco still in positive territory, based on my third paragraph above.
This is perhaps the most interesting chart on that page - inflation adjusted performance, several major metropolitan areas. You can de-select whichever areas you aren't interested in for easier comparison.
Worth reading all the info on that page, though - very informative.
Having said that, we are looking at ridiculously low interest rates right now, plus for those lucky enough not to have lost a job in the pandemic, the pandemic has been financially kind - forced savings. So more savings and low interest rates is fueling something of a boom. And the stock market has boomed, so even more growth in available resources.
Here in AZ, (Phoenix Metro) the market is insane - better than at any time since at least 2007, pre-crash. My realtor friend said she's made more money this year in 3 months than all of last year, OR the year before (pre-pandemic). But house prices in the SF Bay Area (CA) are stagnant / falling (* this is contradicted by the information I posted below so take what I say as a bit of anecdotal input, not fact). The new move towards 'work from home' has encouraged / allowed people to ditch their high-priced bay area digs for cheaper "nearby" states (Oregon, Washington, Arizona, Nevada). I sold my house in the bay area in 2017; it sold within a month. That same house is now on the market and hasn't moved in 4 months - unheard of in recent times.
I've always found the "Case-Shiller" indices to be very good to follow. Take a look at this - https://realestatedecoded.com/case-shiller/
Here's a table from that site showing the hottest markets:
Interesting to see San Francisco still in positive territory, based on my third paragraph above.
This is perhaps the most interesting chart on that page - inflation adjusted performance, several major metropolitan areas. You can de-select whichever areas you aren't interested in for easier comparison.
Worth reading all the info on that page, though - very informative.
#6
Re: Housing Market
A rise in the base interest rate of 1% will lead to a reduction in prices of around 10%. Rule of 10x is generally speaking pretty accurate. Do we expect the Fed to raise rates in the next 12 months? Personally, I would say no.
Unless mortgage forbearance and rent relief ending lead to a rash of mortgage defaults, I don't see a price drop anytime soon.
Unless mortgage forbearance and rent relief ending lead to a rash of mortgage defaults, I don't see a price drop anytime soon.
#7
Re: Housing Market
I think what he means Rete is that offers are being made without survey contingencies - i.e the offer states that a bad survey is not a valid reason to cancel the contract.
That is not normal in a balanced market.
That is not normal in a balanced market.
#8
Re: Housing Market
A rise in the base interest rate of 1% will lead to a reduction in prices of around 10%. Rule of 10x is generally speaking pretty accurate. Do we expect the Fed to raise rates in the next 12 months? Personally, I would say no.
Unless mortgage forbearance and rent relief ending lead to a rash of mortgage defaults, I don't see a price drop anytime soon.
Unless mortgage forbearance and rent relief ending lead to a rash of mortgage defaults, I don't see a price drop anytime soon.
regardless of the financial aid schemes, there isn’t much inventory on the market. I wonder if that will improve over the summer months?
#9
Re: Housing Market
It's possible it may be extended again, largely depends on the situation with the vaccination program.
Inventory is typically at it's highest in the months of March & April, but that of course is in a typical year. There is certainly pent up demand for moving house one would assume, but not necessarily int he type of house that you are looking for. I suspect that the glut of inventory will be in high density metro areas as people are still leaving cities in droves.
In the absence of a crystal ball, and as long as you can find a house that you a) want and b) can afford, strike while the iron is hot. Don't wait for the mythical crash.
Inventory is typically at it's highest in the months of March & April, but that of course is in a typical year. There is certainly pent up demand for moving house one would assume, but not necessarily int he type of house that you are looking for. I suspect that the glut of inventory will be in high density metro areas as people are still leaving cities in droves.
In the absence of a crystal ball, and as long as you can find a house that you a) want and b) can afford, strike while the iron is hot. Don't wait for the mythical crash.
#10
Re: Housing Market
It's possible it may be extended again, largely depends on the situation with the vaccination program.
Inventory is typically at it's highest in the months of March & April, but that of course is in a typical year. There is certainly pent up demand for moving house one would assume, but not necessarily int he type of house that you are looking for. I suspect that the glut of inventory will be in high density metro areas as people are still leaving cities in droves.
In the absence of a crystal ball, and as long as you can find a house that you a) want and b) can afford, strike while the iron is hot. Don't wait for the mythical crash.
Inventory is typically at it's highest in the months of March & April, but that of course is in a typical year. There is certainly pent up demand for moving house one would assume, but not necessarily int he type of house that you are looking for. I suspect that the glut of inventory will be in high density metro areas as people are still leaving cities in droves.
In the absence of a crystal ball, and as long as you can find a house that you a) want and b) can afford, strike while the iron is hot. Don't wait for the mythical crash.
So striking while the iron is hot is a risky thing and may lead to negative equity. I am willing to stretch my budget but don't want to be in a 2008 like situation.
#12
Heading for Poppyland
Joined: Jul 2007
Location: North Norfolk and northern New York State
Posts: 14,540
Re: Housing Market
Why don’t you rent for a year?
#14
Re: Housing Market
That’s pretty faulty logic though - if everyone follows your plan you’ll have the exact same problem a year from now.
#15
Re: Housing Market
if the housing market is inflated, it will lead to some kind of cyclical correction sooner or later (like in 2008). So why should one take the risk of falling into negative equity?